Real World Advice for Retailers - How To Increase Sales Even When Sales Are Slow

So you have a successful retail business; or you are on your way to building a successful retail business. You have a good group of employees that are well trained and knowledgeable about your merchandise. You have excellent relationships with your suppliers so you always get stock when you need it. Sales are increasing quarter over quarter, year over year. Business is great right now. But what about when sales slow down because of forces beyond your control, like a slowing economy or greater competition moving into your marketplace? How will you attract customers to your store then? Perhaps you have already seen better days and are experiencing a slowdown in sales right now.

When business slows, most retailers just throw money at the problem. They buy more advertising space in the local newspaper or more commercial time on the TV and radio stations. While this may have an impact, it is a very expensive way to get people to visit your store and maybe not the best use of your cash reserves considering that you may not have as much cash coming in as you are used to having. So what do you do? How do you get people to come to your store without spending a lot of money on advertising?

The answer is simple: get to know your customers when business is good. I can hear many of you saying, but Mike, I do know my customers. I know many of my customers by their first name and even some personal things about some of my long-standing customers. For example, you say, I know that Mr. Smith, likes to buy his wife something from my store for their anniversary each year. Well, you might know enough about your customers to have meaningful conversations with them when they are in your store, or to help them find the perfect item, but do you know what it takes to entice them to come back into your store when business is slow? Do you even know how to contact your customers?

To illustrate my point let me tell you why I buy a lot of my clothes from a specific retailer in my area. Actually, he isn’t all that close to me; in fact, I have to drive 30 minutes across town to get to him, while there are a number of men’s clothing stores only blocks away from me. You might think I am a bargain hunter but, actually, he is one of the more expensive clothiers in the area. Not the most expensive by any means, but well above department store prices. So you must be thinking that I am either really tall or really overweight and I need custom suits and shirts made to measure, but actually I am lucky in that I can wear most things right off the rack. So why do I drive across town and pay good money to buy clothes that don’t need to be custom fitted? Because I like the way the owner makes me feel when I go to his store. Well, you say, my customers like the way I make them feel too – how does this help me get them back into my store when sales are slow? Well, not only does the owner know how I like my pants to fall on my shoes and what colors look best on me, but he also reaches out to me when he hasn’t seen me for a while. Let me repeat that in case you missed it – he reaches out to me when he hasn’t seen me for a while! He keeps track of when I was in his store last and calls me when he hasn’t seen me for a while or when he buys new inventory that he thinks I will like. He doesn’t send an impersonal email or a direct mail piece that may end up in my garbage before I get to see it. He picks up the phone and calls me in my office and chats with me for 30 seconds and then invites me to come and see the latest merchandise he just bought. It may take me a couple of weeks to find the time to visit him but every day, at one point in the day, I will find myself thinking about when I will be able to squeeze in a quick visit to my favorite clothier. Eventually I will make it over to see him and he will make me feel like I am his only customer and I will buy something from him – often, I will buy a lot from him.

So don’t wait until business is slow, start getting your customers’ contact information right now. If you have a computerized POS system, start collecting your customers’ phone numbers and tracking their visits as well as their purchases. If you don’t have a computer, use recipe cards and write down the date each time they come into your store (whether they purchased something or not) and how much they spent.

Collecting customer information is a skill that you and your staff need to develop. Don’t ask for everything all at the same time; do it in stages. Nobody likes standing at the checkout counter for five minutes after they have paid for their merchandise so that you can enter all their contact information into your computer. The first time a customer comes in and purchases from you, just get their name and phone number. Tell them that you sometimes call your customers to let them know when new stock arrives. During that visit, try to find out something meaningful about the customer, like product preferences or what they do for a living. The second time, ask them for their email address so that you can send them notices of special unadvertised sales that only your preferred customers are invited to. This time find out something new about the customer, the name of their spouse, if you sell to both genders; or children, if you own a toy store; or pet, if you own a pet shop (you get the idea.) Add this information to their customer file/card. By the time your customer visits you three times, you will know more about them than most of their co-workers and, more importantly, you will know multiple ways to reach out to your customers and draw them back into your store.

Use the following list of ideas to help you fuel a new, proactive direct marketing initiative for your store.

1. Use a computer or recipe cards; it doesn’t matter how you maintain your customer list. In the words of that famous running shoe company – just do it! A customer database is the single most important asset you can own, next to your inventory. With a customer database you can reach out and touch people that are already familiar with your store and your employees and have a good impression of their last buying experience with you.

2. Track the amounts purchased by your customers then make sure you contact your top 100 customers every quarter.

3. Conduct a direct mail campaign inviting your customers to join your “preferred Customers Club” then give them a coupon for 10% off their next purchase if they sign up.

4. Start a monthly e-magazine that keeps your customers informed of new developments in your marketplace as well as new products coming in the future, special events, and sales. Use this platform to highlight your employees so that your customers will feel more comfortable with them the next time they come into your store.

5. Hold a special, invitation-only sale for customers that have already bought from you, or have purchased a certain amount within the last year. Send out formal, hand written invitation cards three weeks before the event and follow-up with phone calls the week before.

6. Make sure you train all your staff to collect customer information. Before you know it, you will have hundreds of customers that you can call to drive up sales whenever business is slow.

7. If you have staff members that are really good at developing relationships with your customers, encourage them to reach out to a segment of your customer base that they can call their own. If a customer always deals with a certain employee, he/she will likely respond better to a phone call from someone they know.

So what are you doing with your down time? Are you reading the paper, trying to figure out which ones to put ads into or are you calling your best customers and giving them a reason to come and spend more money in your store?

Michael Steg is the Managing Director of Tri-City Retail Systems, a Gold Certified Microsoft consulting firm specializing in implementing management systems for retail companies of all sizes. After working with hundreds of retailers for over 20 years, Michael has learned what it takes to operate a successful retail business. In addition, he has witnessed a great number of mistakes that retailers make that significantly impact their ability to succeed in the competitive retail industry. Over t...